National minimum wage will rise by 3% to £6.50 per hour

Business secretary Vince Cable has announced that the national minimum wage will increase by 3% to £6.50 an hour starting in October.

15:51 13 March 2014

A week after David Cameron said that he was in favour of recommendations for 3% increase wage, business secretary Vince Cable has announced that starting on October, minimum wage will be increased to £6.50 an hour.

He added that the government would accept recommendation of the Low Pay Commission (LPC) for above-inflation increase of 19p.

Meanwhile, Chancellor George Osborne has said that he ultimately wants it to rise to £7.00.

As recommended by the LPC, the adult rate will increase about 3% from £6.31 to £6.50 an hour, the rate for 18- to 20-year-olds will rise 2% from £5.03 to £5.13 and the rate for 16- to 17-year-olds will go up 2% £3.72 to £3.79. There will also be a 2% increase in the rate for apprentices, from £2.68 to £2.73.

Cable said: "The recommendations I have accepted today mean that low-paid workers will enjoy the biggest cash increase in their take-home pay since 2008. This will benefit over 1 million workers on national minimum wage and marks the start of a welcome new phase in minimum wage policy.

"The LPC's new forward guidance gives us a much better understanding of how an economic recovery can be translated into faster and significant increases in the national minimum wage for low-paid workers, without costing jobs.”